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Mayor tweaks budget pitch: KPC to be funded; bonds on the table for Homer facility

Posted: Thursday, March 10, 2011

By BRIELLE SCHAEFFER

Kenai Peninsula Borough Mayor Dave Carey recently put forth some ideas that change the game for the fiscal year 2012 budget process.

Carey will not be proposing funding cuts to Kenai Peninsula College, and he is hoping the borough assembly will put forth a couple of budget decisions to the voters in October, including a proposition repealing the grocery tax exemption and a bond issue on the Homer Solid Waste Transfer Site.

The borough administration has been struggling with the fiscal year 2012 budget, negotiating ways to make cuts to accommodate the $9 to $12 million Homer Solid Waste Transfer Site that needs to be constructed in anticipation of the closure of the Homer Landfill.

Kenai Peninsula College Director Gary Turner was pleased that the money for post-secondary education was back in the budget.

"Those funds are very important to the college," he said. "I'm glad to see he proposed that funding to the borough assembly and I'm hoping to see the borough assembly approve it."

He said that after Carey proposed cutting funds for Kenai Peninsula College from his budget the community rallied around the college. And the local funding really helps it provide services to residents.

"The support of the borough really helped us do things extra for borough residents," Turner said.

Carey said he decided to return the college's funding to his borough budget after discussions with several people, including some in Juneau.

"They believed that rescinding the funding for the college at this time could send the wrong signal to the UA (Board of Regents)," he said.

He said he does not want to decrease the probability that the 2010 state bond issue projects regarding student housing and the new technical education building at the college are approved by the university political system or the state Legislature.

"It would appear if I don't ask for funding I'd be saying the community doesn't support KPC," Carey said. "That's not what I was saying at all. I was saying we don't have the money for a solid waste project."

"From my standpoint I don't know the politics of the university and I sure don't want to get involved with it," Carey added.

But with that money back in the mayor's proposed budget, he's hoping to ask residents for other ways to free up some revenue to fund the Kenai Peninsula Borough School District.

"I will propose that the topic of the nine month, non-prepared food sales tax exemption be placed on a borough ballot during 2011," Carey said. "Since the exemption was generated by a public initiative, I do not believe it would be appropriate to ask the assembly to rescind it without including a ballot measure."

He said when the electorate voted in favor of the grocery tax exemption a little more than two years ago no one knew how much money non-prepared food would take out of sales tax revenues and how damaging the loss of that sales tax is to education funding.

The extra nine months of the non-prepared food sales tax generates some $2.8 million for the borough. By law, all of the borough's sales tax revenue goes to fund education.

Carey said if residents want less money for schools they can vote to keep the sales tax exemption but if they want more money for education they can vote to repeal the exemption this October.

Another topic on the ballot this fall will be the Homer Solid Waste Transfer Facility.

Carey said that according to borough ordinance any project more than $2 million has to be put to vote.

"Since it's going to the voters anyway, they have to approve the project, I want to ask voters whether or not they want to bond for the project," he said.

The reason the bond issue for this facility was temporarily off the table was because Carey felt that it would not pass.

"I thought they would not pass it and I made a mistake," he said. "The democratic process says you educate people, you dialogue with people and you let people make a decision."

By the time the bond issue for the solid waste transfer site appears on the ballot the borough will know whether it will receive money from the state for this project.

"By the time we receive money from the state we might not need a bond issue," Carey said.

In order to accommodate the unknown state funding, Carey said he expects the ballot's bond issue to be more of a general question.

"What I anticipate is asking 'Would you approve of a bond issue on solid waste?'" he said. "I don't envision putting the bond issue directly on the ballot but asking voters, 'Are you open to it?'"

Another game changer for the budget process is the borough's ability to spread out funding for the Homer transfer facility over several years.

"We're also asking the state to allow us to extend the permit for the facility in Homer past August in 2013," Carey said. "The state has given us nothing final but the state seems to look very favorably on our request. I believe we're going to get an extra season of time to do this project."

That means the borough does not have to have the entire multi-million cost of the facility in the budget for next year, and that alleviates some of the pressure for in this year's budget cycle.

"That takes a huge burden off my shoulders," Carey said.

So instead of cutting the borough's costs to accommodate a $12 million project, Carey is looking more at setting $2 million dollars aside in fiscal year 2012.

"Trying to come up with a budget for a $12 million-dollar project without knowing what the state will fund is impossible. There's not $12 million to be found," he said. "I was looking at making a decision before I had all the needed information but that's not a way to make public policy."

"We still have to do what the government is supposed to do," Carey added. "We can't shut down the government to pay for one project."

Carey said he will finish his final proposed budget next month and officially submit it to the assembly the first week of May. The assembly has to approve a budget for fiscal year 2012 by early June.

Brielle Schaeffer can be reached at brielle.schaeffer@peninsulaclarion.com.